"The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture."
~Ludwig von Mises

May 7, 2008

Paul Volcker on the demerits of central banks buying mortgage bonds

A direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve seems to test the time-honored central bank mantra in times of crisis: lend freely at high rates against good collateral. It tests it to the point of no return.

~ Paul Volcker, speech before the Economic Club of New York, April 8, 2008